What happened

The share price of AssetMark Financial Holdings (AMK 0.39%) was up 14.6% this week from last Friday's close as of 1 p.m. ET today, according to data provided by S&P Global Market Intelligence. It had gone up as much as 17.4% during the week. The stock price is down about 10.2% year to date to $23.54 per share as of 1 p.m. ET

It outperformed the major indexes, as the Dow Jones Industrial Average was down 2.6%, the S&P 500 was off 4.7%, and the Nasdaq had dropped 7.1% this week as of 1 p.m. ET on Friday.

So what

AssetMark Financial offers a turnkey asset management program, or TAMP, which allows its customers, primarily financial advisors, to outsource certain investment management functions and services through its automated platform.

The catalyst for the surge was the company's third-quarter earnings report, which came out Tuesday. The company had a strong quarter, increasing revenue and income year over year, and beating analysts' expectations for both.

Specifically, the TAMP generated $155 million in revenue, up 10.7% year over year, and $30.1 million in net income, up 146% year over year, with earnings per share (EPS) of $0.41. It beat analysts' revenue estimates by roughly 6% and EPS projections by about 28%. AssetMark also increased its profit margin to 19.5%, from 8.8% a year ago.

Assets on the platform dropped 8.6% to $79.4 billion due to market depreciation and lower net flows, but it continues to grow its customer base, adding 159 new advisors and more than 2,900 new households to the platform in the quarter. Currently, it has more than 8,700 advisors and some 223,000 investor households on the platform.

"Our deep connectivity with our advisors, especially during periods of uncertainty, has enabled us to deliver another quarter of record results -- notably, record top and bottom line financial results and adjusted margin expansion of 200 bps year-over-year," Natalie Wolfsen, CEO of AssetMark, said in a statement.

Now what

This is a challenging market for asset managers as the market has been in bear market territory for most of the year. And for AssetMark, most of its revenue comes from asset-based fees. However, AssetMark has been able to reduce its operating expenses and diversify its revenue stream with more spread-based revenue, expanded services, and income from licensing its technology.

It is also a difficult market for its clients, the advisors and brokers, which Wolfsen said the company is looking to capitalize on.

"In this challenging environment, we are committed to playing offense and doing even more to demonstrate our value to existing and prospective advisors," she said. "We have increased our representation at broker-dealer conferences, increased our spend on high-impact digital lead generation, and are hosting more live, community-based events. These efforts are driving new advisor engagement, and we are confident in the opportunity ahead."

AssetMark is on the expensive side with a price-to-earnings (P/E) ratio that has gone up to 23.6 but the forward P/E ratio is a comfortable 11.7. It is still a difficult market for asset managers, but AssetMark has outperformed many of its competitors and is worth keeping an eye on.